Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

While the OFFICE of President remains in highest regard at NewEnergyNews, this administration's position on the climate crisis makes it impossible to regard THIS president with respect. Below is the NewEnergyNews theme song until 2020.

When governments reform fossil fuel subsidies, there are many competing demands for how to reallocate resources, including spending on public health, education and social protection. This report makes the case for placing the promotion of clean energy1 alongside these other priorities and describes the economic, social and environmental benefits that such a move would bring, through a “subsidy swap.” The report sets out the international context of subsidy swaps; summarizes notable country experiences with swaps in India, Indonesia, Zambia and Morocco; and calls for policy-makers to include swaps as part of their fossil fuel subsidy reform implementation strategies.

Key Findings

1. Fossil fuel subsidies are a key barrier to a transition to a clean energy system. Although linked to a reduction in emissions, their reform alone will be unlikely to deliver the permanent emission reductions necessary to meet climate change targets. A “swap”— reallocating some of the savings from subsidy reform to fund the clean energy transition—could magnify the contributions to long-term, permanent emission reductions, the economy, jobs, public health and gender equality.

2. Swaps are already taking place—at a global level, fossil fuel subsidies have declined while renewable investments are now greater than investments in fossil fuel-based energy generation. But the pace of change needs to accelerate considerably—almost 70 per cent of total energy demand growth in 2018 was still met through fossil fuels.

3. There are still significant political barriers to reform, however, that are country specific. For reformers, the challenge is to change the political dynamic by increasing the engagement of already supportive, influential actors and developing policies that address the concerns of actors that are neutral or moderately opposed to change.

4. Sharing experience between countries is a key tool to show how swaps can be implemented and that a clean energy transition funded by subsidy reforms is a feasible and possible option for other countries.

The term “subsidy swap” is a shorthand term for a wide range of policies that redirect government support in the form of subsidies, from fossil fuels to clean energy.2 The goal of the subsidy swap is to bring subsidy policy in line with social, economic and environmental priorities and promote a transition to clean energy systems. A definition of the concept is provided in Box 1.

Box 1. The definition of subsidy swap

The swap concept is simple: it refers to redirecting government support from fossil fuels to clean energy. This does not need to involve explicit earmarking (or “hypothecation”) of funds: savings from fossil fuel subsidy reform and spending on clean energy could happen independently in the government budget. There is also no expectation that all reform savings be reallocated to clean energy; governments have many priorities. However, sufficient reallocation should take place to make an appreciable difference to the rate of clean energy deployment.

The core concept of a clean energy swap is that it accelerates the replacement of fossil fuel-based energy systems with sustainable energy through a shift in government priorities as expressed through funding or fiscal policy changes.

The two key elements are that: 1) fossil fuel subsidies are reduced and that 2) this happens alongside measures that increase the deployment of sustainable energy.

The Global Subsidies Initiative (GSI) uses a definition of the term “subsidy” based on the World Trade Organization’s Agreement on Subsidies and Countervailing Measures. The agreement determines that subsidies exist where governments:

This report summarizes the International Institute for Sustainable Development’s experience of developing and documenting subsidy swaps over several years, sets out the international context of subsidy swaps, and makes the case for policy-makers to include subsidy swaps as part of their fiscal and energy policies.

Figure 1 shows how swaps fit into the broader subsidy reform debate. Some subsidies just do not make sense: they support fossil fuel-based energy, they are costly to governments and they undermine clean alternatives. They may also fail to achieve their objectives or have perverse, unintended consequences. In such cases, the policies can be removed. In other cases—largely, consumer subsidies for electricity and liquefied petroleum gas (LPG)—the policies may have important linkages with energy access, poverty reduction and health. Here, targeting is an important consideration of the subsidy reform process. Finally, it may be possible to continue to support energy access by swapping from a fossil fuel subsidy to a clean energy subsidy. Regardless of whether subsidies are removed or better targeted, reform can create savings to fund the clean energy transition. This is a subsidy swap: shifting government resources away from fossil fuels and toward a clean energy transition.

In practical terms the vision of the swaps concept means moving from where we are today, where fossil fuels receive huge subsidies in much of the world, to an end point where most of our energy is derived from unsubsidized clean energy. Globally there are still more subsidies directed toward fossil fuel consumers and producers than toward renewable energy: currently around USD 372 billion is spent on producer and consumer fossil fuel subsidies, overshadowing the USD 100 billion in support to renewable energy (Best et al., 2015; International Energy Agency [IEA], 2018b; Merrill et al., 2017).

However, at a macro level, we can already see a swap in financial flows beginning to take place: fossil fuel subsidies are down and investment in renewable energy is up, as illustrated in Figure 2 and Figure 3. Figure 2 shows that fossil fuel subsidies have fallen overall since 2012, but progress has not been linear: following the rebound in crude oil prices in 2017, fossil fuel consumer subsidies started rising again. Figure 3 shows that renewable investments have exceeded fossil fuel investments every year since 2008, a key inflection point. The falling cost of renewables over recent years and increasing investment implies that the same dollars can now fund more renewable-powered generation: every year since 2014 the world has installed a greater capacity of renewables than fossil fuel-based generators (Figure 4), a second inflection point. Figure 5 shows that the overall share of electricity production from renewable energy is growing, but there is still a long way to go to reach a third inflection point where renewable energy starts to generate most electricity. In 2016, 57 per cent of the gross electricity production was from fossil fuels in Organisation for Economic Development and Cooperation countries. Outside the electricity sector, the situation was less positive: 70 per cent of total energy demand growth in 2018 was met through fossil fuels (IEA, 2019a). Despite the progress made, in absolute terms, government subsidies and investments in fossil fuels still far outweigh clean energy…

Fossil fuel to clean energy subsidy swaps are already taking place—at a global level, fossil fuel subsidies have declined while renewable investments are now greater than investments in fossil fuel-based generation. But the pace of change needs to accelerate considerably. Although fossil fuel subsidies are linked to emission reductions, their reform alone will be unlikely to deliver the permanent emission reductions necessary to meet climate change targets. A swap, reallocating some of the savings from subsidy reform to fund the clean energy transition, could magnify the contributions to long-term, permanent emission reductions while bringing additional economic and social benefits, in particular in relation to jobs, public health and gender equality.

Four countries—India, Indonesia, Zambia and Morocco—have already been taking concrete action and leading the way by implementing fossil fuel to clean energy swaps. Sharing their experiences is a key tool to show how swaps can be implemented and that a clean energy transition funded by subsidy reforms is a feasible option for other countries. Going forward, governments have an opportunity to focus on higher-impact swaps by redirecting support to large-scale on-grid renewables and implementing mechanisms to leverage private finance for clean energy projects.

Review of OIL IN THEIR BLOOD, The American Decades by Mark S. Friedman

OIL IN THEIR BLOOD, The American Decades, the second volume of Herman K. Trabish’s retelling of oil’s history in fiction, picks up where the first book in the series, OIL IN THEIR BLOOD, The Story of Our Addiction, left off. The new book is an engrossing, informative and entertaining tale of the Roaring 20s, World War II and the Cold War. You don’t have to know anything about the first historical fiction’s adventures set between the Civil War, when oil became a major commodity, and World War I, when it became a vital commodity, to enjoy this new chronicle of the U.S. emergence as a world superpower and a world oil power.

As the new book opens, Lefash, a minor character in the first book, witnesses the role Big Oil played in designing the post-Great War world at the Paris Peace Conference of 1919. Unjustly implicated in a murder perpetrated by Big Oil agents, LeFash takes the name Livingstone and flees to the U.S. to clear himself. Livingstone’s quest leads him through Babe Ruth’s New York City and Al Capone’s Chicago into oil boom Oklahoma. Stymied by oil and circumstance, Livingstone marries, has a son and eventually, surprisingly, resolves his grievances with the murderer and with oil.

In the new novel’s second episode the oil-and-auto-industry dynasty from the first book re-emerges in the charismatic person of Victoria Wade Bridger, “the woman everybody loved.” Victoria meets Saudi dynasty founder Ibn Saud, spies for the State Department in the Vichy embassy in Washington, D.C., and – for profound and moving personal reasons – accepts a mission into the heart of Nazi-occupied Eastern Europe. Underlying all Victoria’s travels is the struggle between the allies and axis for control of the crucial oil resources that drove World War II.

As the Cold War begins, the novel’s third episode recounts the historic 1951 moment when Britain’s MI-6 handed off its operations in Iran to the CIA, marking the end to Britain’s dark manipulations and the beginning of the same work by the CIA. But in Trabish’s telling, the covert overthrow of Mossadeq in favor of the ill-fated Shah becomes a compelling romance and a melodramatic homage to the iconic “Casablanca” of Bogart and Bergman.

Monty Livingstone, veteran of an oil field youth, European WWII combat and a star-crossed post-war Berlin affair with a Russian female soldier, comes to 1951 Iran working for a U.S. oil company. He re-encounters his lost Russian love, now a Soviet agent helping prop up Mossadeq and extend Mother Russia’s Iranian oil ambitions. The reunited lovers are caught in a web of political, religious and Cold War forces until oil and power merge to restore the Shah to his future fate. The romance ends satisfyingly, America and the Soviet Union are the only forces left on the world stage and ambiguity is resolved with the answer so many of Trabish’s characters ultimately turn to: Oil.

Commenting on a recent National Petroleum Council report calling for government subsidies of the fossil fuels industries, a distinguished scholar said, “It appears that the whole report buys these dubious arguments that the consumer of energy is somehow stupid about energy…” Trabish’s great and important accomplishment is that you cannot read his emotionally engaging and informative tall tales and remain that stupid energy consumer. With our world rushing headlong toward Peak Oil and epic climate change, the OIL IN THEIR BLOOD series is a timely service as well as a consummate literary performance.

Review of OIL IN THEIR BLOOD, The Story of Our Addiction by Mark S. Friedman

"...ours is a culture of energy illiterates." (Paul Roberts, THE END OF OIL)

OIL IN THEIR BLOOD, a superb new historical fiction by Herman K. Trabish, addresses our energy illiteracy by putting the development of our addiction into a story about real people, giving readers a chance to think about how our addiction happened. Trabish's style is fine, straightforward storytelling and he tells his stories through his characters.

The book is the answer an oil family's matriarch gives to an interviewer who asks her to pass judgment on the industry. Like history itself, it is easier to tell stories about the oil industry than to judge it. She and Trabish let readers come to their own conclusions.

She begins by telling the story of her parents in post-Civil War western Pennsylvania, when oil became big business. This part of the story is like a John Ford western and its characters are classic American melodramatic heroes, heroines and villains.

In Part II, the matriarch tells the tragic story of the second generation and reveals how she came to be part of the tales. We see oil become an international commodity, traded on Wall Street and sought from London to Baku to Mesopotamia to Borneo. A baseball subplot compares the growth of the oil business to the growth of baseball, a fascinating reflection of our current president's personal career.

There is an unforgettable image near the center of the story: International oil entrepreneurs talk on a Baku street. This is Trabish at his best, portraying good men doing bad and bad men doing good, all laying plans for wealth and power in the muddy, oily alley of a tiny ancient town in the middle of everywhere. Because Part I was about triumphant American heroes, the tragedy here is entirely unexpected, despite Trabish's repeated allusions to other stories (Casey At The Bat, Hamlet) that do not end well.

In the final section, World War I looms. Baseball takes a back seat to early auto racing and oil-fueled modernity explodes. Love struggles with lust. A cavalry troop collides with an army truck. Here, Trabish has more than tragedy in mind. His lonely, confused young protagonist moves through the horrible destruction of the Romanian oilfields only to suffer worse and worse horrors, until--unexpectedly--he finds something, something a reviewer cannot reveal. Finally, the question of oil must be settled, so the oil industry comes back into the story in a way that is beyond good and bad, beyond melodrama and tragedy.

Along the way, Trabish gives readers a greater awareness of oil and how we became addicted to it. Awareness, Paul Roberts said in THE END OF OIL, "...may be the first tentative step toward building a more sustainable energy economy. Or it may simply mean that when our energy system does begin to fail, and we begin to lose everything that energy once supplied, we won't be so surprised."

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